A recently inked $37/€34.3 million deal sponsored and paid for by France will place thousands of assault rifles untested in war, and manufactured by a company inexperienced in modern, large-scale military small arms production, into the hands of Ukrainian frontline combat soldiers.
The government-to-government military assistance package also plans the delivery of French sniper rifles and grenade launchers at a per-unit cost to the French taxpayer possibly as much as three times prevailing market prices for comparable firearms, Kyiv Post researchers found.
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The Saint-Etienne-headquartered arms manufacturer Verney-Carron, a member unit of the Cybergun Group, on Nov. 6, announced it had signed a contract with the Ukrainian state arms import-export agency Ukrspetseksport to deliver 10,000 VCD-15 5.56mm assault rifles, 2,000 VCD-10 7.62mm sniper rifles and 400 LP40 grenade launchers.
Paris on Sept. 28 announced it had earmarked an additional €200 million ($216 million) to a Ukraine Support Fund created in 2022 to help Kyiv purchase French-made arms to help resist the Russian invasion of Ukraine.
Per the terms of the November arms transfer, the Armed Forces of Ukraine (AFU) would receive a French-made copy of the widely-used popular American AR-15 [5.56mm NATO] semi-automatic rifle, a French-made copy of a now infrequently-used semi-automatic sniper rifle system called the AR-10 [essentially a 7.62mm NATO version of the AR-15] and single-shot grenade launchers commonly used by police as weapons to launch tear gas and flash grenades at crowds.
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According to the open-source Yahoo!Finance market watch group, Verney-Carron in 2022 was unprofitable, with a gross revenue of €9.64 million ($10.44 million) and with spending 19.14 percent more on all company costs than it took in in earnings. Once the November Ukraine arms deal is complete Verney-Carron will, by those numbers, close to quadruple its annual earnings.
Corporate profitability might be even more. Were the Ukrainian military to go onto the French civilian market and buy those Verney-Carron weapons, the assault rifle would cost about €2,000 ($2,165) a piece, and the sniper rifle between €3-4,000 ($3,250-4,330) a piece, Kyiv Post researchers found.
The LPD-10 grenade launcher did not appear to be on sale for potential civilian use. Similar grenade launchers sold to European police departments typically are advertised at €1,000-3,000 ($1,080-3,250) each.
Taken together, those numbers seem to show Verney-Carron is on track to super-profit by charging Ukrspetseksport 20-30 percent above the prices the company charges, for the same weapons, when sold on the French civilian market. That calculation does not take into account possible discounts for wholesale orders.
Verney-Carron is one of France’s oldest weapons manufacturers. The company’s main business in 2022 was producing high-end hunting rifles and shotguns primarily for the French civilian market. According to some open-source market media, the company at that time employed 64 people and was in the red, with a minus 19.14 percent profit margin, i.e., a loss.
Kyiv Post requested comment and more details about the weapons sale from Verney-Carron and Ukrspetseksport. Neither company had responded to Kyiv Post by the time this article was published.
If the cost of the weapons financed by the French taxpayer for the Ukrainian fighting man is compared to prices prevailing in US markets, then the terms agreed between the French government and the Ukrainian state arms import/export monopolist Ukrspetseksport look even worse.
On average, an actual AR-15 rifle, the precise firearm the Verney-Carron reproduces as an exact copy, under license, can be acquired by an American gun buyer demanding high quality and military specs for $800-1,000 a rifle: less than half what the French appear to be charging the Ukrainians.
Offers of a Verney-Carron VC10 .30 sniper rifle on the French civilian market are limited but offers can be found from €2,000-3,600 ($2,165-$3,898) Prices for the same AR-series precision-fire rifle, in the US civilian market, typically range from $800-$2,500.
According to field operators interviewed by the post, the AR-style system is unpopular with Ukrainian snipers, who prefer heavier barrels and a bolt action rather than a semi-automatic firing function for their weapon.
Police-grade grenade launchers generally similar to the Verney-Carron LP-40 are commonly offered on the US civilian market in the $800-$1,500 price range. Kyiv Post was not able to determine whether the per weapon price paid by Ukrspetseksport for the French grenade launchers, in its deal with Verney-Carron, was greater or less than those prevailing in the US.
Mike Riedmuller, a retired US Army officer trained in small arms maintenance and management, including automatic rifles, sniper rifles and grenade launchers, said of the Verney-Carron-Ukrspetseksport deal terms:
“The price is way too high. Ukraine would be better off driving to France, buying them off the shelf, and driving them back to the front,” Riemuller said. “Even with European gasoline (petrol) prices, it would be cheaper.
“If there is some part of the deal where accessories are included, or mass quantities of ammo are included then the price becomes more reasonable. But there is no indication of that.”
Riedmuller, a combat veteran serving in Bosnia and Iraq, and a longtime field operator of the American AR-15 assault rifle, in comments to Kyiv Post, said most soldiers wouldn’t want to take the risk of going into battle with a rifle manufactured by a boutique weapons company normally producing a low number of weapons each year, and suddenly needing to ramp up equipment and staff to fill an unprecedented order of thousands of battle rifles.
One of France’s oldest arms manufacturers, and family-owned for six generations, Verney-Carron was founded in 1820. From 1978-2002, the company and its production facility in St. Etienne had produced elements for the FAMAS, the French army’s standard rifle from 1978-2002.
The lack of recent experience mass-producing combat weapons would, under most circumstances, lead infantry soldiers going into combat to trust their lives to a rifle produced by a more tested manufacturer, Riedmuller said.
French arms expert Gaetan Moussion, one of the few civilians to test the VCD15 extensively and make public his findings, gave the assault rifle a glowing review. In a March 2022 series of tests, according to his account, he fired “several thousand” shots through a VCD15 at a firing range in Gajoubert, Alsace region, and experienced no jams. The weapon shown in a YouTube video was a civilian model not capable of full-automatic fire.
According to Moussion’s voiceover, the weapon provided to him by the French army was entirely military spec and built, in Verry-Carron’s St. Etienne facility, wholly of French parts – excepting a “match grade” 14.5-inch (37-cm) Lothar-Walther barrel (Germany) and a Fab Defense (Israel) butt stock.
Verney-Carron’s deep background in shotguns and hunting rifles for demanding customers, to very high tolerances, makes the company more than capable of manufacturing a military-grade assault rifle, Moussion said.
“We see that we are not dealing with people who started yesterday,” Moussion said. “(I)t’s 200 years of tradition, 200 years of history.” He later confirmed his findings to Kyiv Post directly.
Currently, the only reported actual fielding of the VCD-15 assault rifle is an unspecified but probably small number of weapons issued to the Special Forces of the Navy of Morocco, a traditional French ally.
From Mar. 1 to 15 the US Special Operations Command Africa headed up a multinational exercise called Flintlock 2023 with about 1,300 service members in contingents from 30 nations.
Images published by the US Department of Defense showed two Moroccan commandos training with the French rifle, unloaded. Kyiv Post was unable to find convincing evidence the VCD15 has ever seen combat service.
Cybergun, a publicly traded French paintball equipment manufacturer and civilian firearms wholesaler bought Verney-Carron in 2022, at the time saying it would inject capital to improve Verney’s equipment and product competitiveness.
The value of the deal was not disclosed, but, as a parent company of Cybergun’s Sept. 30, 2022 -June 30, 2023, last-twelve-months total revenue was a relatively modest $35 million: almost exactly the value of the Ukrspetseksport November sale.
Cybergun had not responded to Kyiv Post request for comment by the time this article was published.
Verney-Carron’s capacity to upscale manufacturing capacity from shotguns and hunting rifles to mass production of military assault rifles and sniper rifles, was not clear.
A 2020 sales brochure offered potential civilian customers a product selection almost wholly of high-end shotguns and hunting rifles, many engraved.
A 2018 Polish media article announcing the start of civilian-use VC10 sniper rifle manufacturing described Verney-Carron’s shop floor as “small” and said about 80 staff were on shift producing weapons.
Shane Matthews, a former British army sniper with combat experience in Ukraine, and a long-time small arms developer and tester, said he was unsure of Verney-Carron’s capacity to fill the massive Ukrainian order.
Scaling up production might not go smoothly and weapons quality – a life-or-death matter on the front line – would be difficult to ensure, he warned.
“The Verney hunting rifles and shotguns seem to be high quality and certainly their price reflects that,” Matthews said in comments to Kyiv Post.
“But why would I trust a rifle from them? I’m sure their gunsmiths can make an AR-15, they have the machines to make it… (But) nothing about (them) indicates Verney has the ability to produce in quantity.”
A 2022 report citing open-source corporate data showed Verney-Carron’s workforce had fallen from 80 reported in 2018 to 64 people. It was not clear whether the staff reduction was due to cost-cutting or capital investments and improved manufacturing efficiency, however, other open-source data of Verney-Carron performance reported the firm’s annual earnings in 2022 was well in the red, with outlays exceeding revenues by 19 percent.
Despite that lack of profitability, French capital markets reacted enthusiastically to the November news of the – for French arms manufacturing – massive Ukrainian arms order to Verney-Carron.
The company share price, bumping along at €6.40 two weeks before the deal was announced, shot up to € 8.20 a share on Nov. 3, some 72 hours before the weapons sale’s public announcement. A month later share prices were still strong at €8.80.
Note to readers: A follow-up article will discuss weapons quality in more detail.
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